GP to BC Migrations: How to Ensure Vendor 1099 Amounts are Accurate After the Migration

Users that have migrated from Microsoft Dynamics GP to Dynamics Business Central will find that vendor 1099 data does not get migrated to Business Central. As such, I’d like to show you how to obtain vendor 1099 amounts from GP, as well as how to enter them into Business Central to ensure accurate 1099 year-end reporting:

To obtain all 1099 amounts in GP take the following steps (use a copy of the company database as it was at the time you migrated):

First, clear out all Minimum Amounts in the 1099 Setup window for all Tax Types:

  1. Click on Microsoft Dynamics GP >> Tools >> Setup >> Purchasing >> Payables >> 1099 Setup button to open the 1099 Setup window.
  2. Zero out all amounts in the ‘Minimum Amount’ column for every Tax Type (Dividend, Interest, Miscellaneous, Nonemployee Compensation). *This is what will allow you to report on ALL 1099able amounts regardless of thresholds.
  3. Click OK in the 1099 Setup window, and then click OK in the Payables Setup window to save your changes.

Next, print the 1099 Edit List for Each Tax Type:

  1. Click on Microsoft Dynamics GP >> Tools >> Routines >> Purchasing >> Print 1099 to open the Print 1099s window.
  2. Select an appropriate 1099 Type (Dividend, Interest, Miscellaneous, Nonemployee Compensation).
  3. Make sure the 1099 Year is accurate.
  4. Mark the radio button for Vendor Restrictions to ‘All’ to ensure you print for all vendors.
  5. Click the ‘Print’ button at the top of the screen to print the 1099 Edit List:

This will give you everything that GP has classified as 1099’able regardless of thresholds.

  1. Repeat steps 1-5 for every 1099 Type.

Next, test the following steps in Business Central (We recommend this be tested first in a Sandbox Environment to ensure desired results are obtained prior to implementing in production):

First, make sure each vendor is assigned an appropriate IRS 1099 code on Payments Fast Tab on the Vendor Card (Search on ‘Vendors’, open the Vendor list page, and select appropriate vendor to open the Vendor Card):

There are a couple of options when it comes to entering these 1099 amounts in Business Central:

Option 1 – Enter, post, and apply a 1099able invoice/payment for the total GP-1099 amount for each applicable vendor. The easiest way to do this is via the General Journal window:

Reportable 1099 values are not recorded until an invoice is paid off/applied in Business Central. As such, it is necessary to enter both an invoice and a payment. Once the payment has been applied to the invoice – the 1099 amount will be recorded for that vendor, and you will have the ability to report on it.

  1. Navigate to General Journals and create a new batch.
  2. For the first line:
    • Make sure the Posting Date is accurate.
    • Document Type = Invoice
    • Let the Document Number default in.
    • External Document No. = Something to show this is your 1099 Beginning Balance from GP
    • Account Type = Vendor
    • Account No. = Appropriate Vendor
    • Amount = Enter a negative amount to represent the invoice total for your 1099 Beginning Balance from GP
    • Account No. = Enter appropriate account (We recommend using the ‘same’ account for both the debit and the credit, so this creates a ‘wash’ overall in the GL.
    • Enter appropriate dimensions.
  1. For the second line:
    • Make sure the Posting Date is accurate.
    • Document Type = Payment
    • Let the Document Number default in.
    • External Document No. = Something to show this associated with your 1099 Beginning Balance from GP
    • Account Type = Vendor
    • Account No. = Appropriate Vendor
    • Amount = Enter a positive amount to represent the payment total for your 1099 Beginning Balance from GP
    • Account No. = Enter appropriate account (We recommend using the ‘same’ account for both the debit and the credit, so this creates a ‘wash’ overall in GL).
    • Enter appropriate dimensions.

Here is an example of what the transactions look like when recording $700.00 in 1099 amounts for vendor ACETRAVE0001:

  1. Preview and then Post the journal by clicking on Print/Post >> Preview Posting, and then Print/Post >> Post or Post and Print. Here is what the GL entries look like when previewing the posting (Notice how the same account was used for the wash affect):

  1. Apply the payment to the invoice(this will make the amount reportable for 1099s):
    • Navigate to the Vendor Card.
    • Select Related >> History >> Ledger Entries to open the Vendor Ledger Entries page for the
    • Place your cursor on the appropriate ‘payment line’, and click on Process >> Apply Entries:
    • In the Apply Entries window put the cursor on the appropriate ‘invoice line’ and click on Process >> Set Application ID.
    • Then click on Process >> Post Application to apply the payment to the invoice.

 

  1. Once the payment has been applied to the invoice, you should be able to report on that 1099 amount for the vendor via appropriate 1099 reports/windows on the Vendor card.
    • The most efficient way to view your 1099 totals/boxes is by clicking on Related >> History >> 1099 Statistics on the vendor card. Here is an example: 

  • Side Note: The 1099 NEC report has not been added to the Vendor Card at this time. If you want to test printing the NEC form itself, you can do that by searching on ‘Vendor 1099 NEC’ to open the Vendor 1099 NEC window and you can print it from there.

Option 2 – Enter the 1099 values associated with GP in the IRS 1099 Adjustments page for the appropriate IRS code:

*Important Notes about this option:

  • Think of the 1099 Adjustments page as a typewriter: The changes/adjustments made here will show on the appropriate 1099 form when printed. However, it will not show on any vendor 1099 reports that rely on vendor transactions to pull in the 1099 values.
  • The adjustments made here WILL NOT show on the 1099 form until there is AT LEAST one valid 1099able document/payment associated with the vendor in question. There must be a minimum of 1 invoice (or 1099able document) that has been paid off for the vendor in order for this option to work.
  1. Search on ‘1099 Form Boxes’ and open the 1099 Form Boxes page – this page will list each Code/box for the 1099s.
  2. Highlight the line that contains the ‘Code’ that needs adjusting, and then click on the numeric value in the ‘Adjustments Exists’ column to open the IRS 1099 Adjustments page:

 

  1. Click ‘New’ on the 1099 Adjustments page, then enter the appropriate Vendor, Year, and 1099 amount:

 

  1. Repeat step #3 for every vendor you need to adjust for this Code/box.
  2. Repeat steps 2-4 for every Code/box that needs to be adjusted.
  3. Finally, print the appropriate 1099 form to verify the adjustment shows as expected.
    • Remember that IF there is not a valid invoice/payment with 1099 amounts that’s been posted for the vendor in question – users will not see the adjustments on the 1099 form.

I hope this information helps!

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